Anthem Blue Cross Settles With California Over Policy Rescissions
Today, California Insurance Commissioner Steve Poizner (R) is expected to announce a settlement with Anthem Blue Cross over a company unit's rescission of individuals' PPO coverage, the Los Angeles Times reports.
The agreement calls for Anthem Blue Cross to:
- Offer coverage to 2,300 members whose policies it rescinded;
- Reimburse the individuals for medical expenses they incurred after losing their coverage with the company, at a cost estimated at as much as $14 million;
- Pay a $1 million fine;
- Simplify its coverage application; and
- Modify the way it sells and manages individual health insurance coverage in California (Girion, Los Angeles Times, 2/11).
According to the Los Angeles Daily Journal, it is unclear whether the insurer will let members resume their previous coverage or offer them new policies at higher premiums (George, Los Angeles Daily Journal, 2/11).
As part of the agreement, the state will drop its case arguing that Anthem Blue Cross violated state health insurance laws.
Leslie Margolin -- president of Anthem Blue Cross Life, the business unit involved in the settlement -- said the company would begin contacting consumers over the next 90 days and sending them information on how to participate in this settlement.
Implications for Legal Rights
The Times reports that consumers can accept the offer for new coverage without waiving their rights to sue Anthem Blue Cross.
However, individuals would have to waive those rights if they accept the insurer's offer to reimburse them for out-of-pocket medical expenses they incurred after Anthem Blue Cross rescinded coverage, according to the Times.
Other Suits Proceed
The settlement between the insurance department and Anthem Blue Cross concludes state investigations into rescissions, but Anthem Blue Cross, Health Net and Blue Shield of California still face individual and class-action lawsuits for their rescission practices (Los Angeles Times, 2/11).
Premium Hikes Draw Criticism
In related news, Anthem Blue Cross's decision to increase premiums for about four-fifths of its policyholders beginning March 1 has sparked an outcry among the insurer's customers.
In a statement, Anthem Blue Cross attributed the premium increase to increasing health care costs, particularly "the increasing need for medical services, the use of new, expensive prescription drugs and advanced technologies" (Colliver, San Francisco Chronicle, 2/11).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.